This paper is a cross-national study testing a framework relating cultural descriptive norms to entrepreneurship in a sample of 40 nations. Based on data from the Global Leadership and Organizational Behavior Effectiveness project, we identify two higher-order dimensions of culture – socially supportive culture (SSC) and performance-based culture (PBC) – and relate them to entrepreneurship rates and associated supply-side and demand-side variables available from the Global Entrepreneurship Monitor. Findings provide strong support for a social capital/SSC and supply-side variable explanation of entrepreneurship rate. PBC predicts demand-side variables, such as opportunity existence and the quality of formal institutions to support entrepreneurship.
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We refrain from using the Global Entrepreneurship Monitor's Total Entrepreneurial Activity index, which combines the rates of nascent entrepreneurs and new business ownership rate, since we are interested in the prediction of actual behavior, that is, setting up a new firm/running an established firm, and not in claims that one is about to do so (i.e., nascent entrepreneurship).
Another operational definition of values is to ask respondents to indicate what their society should be like (e.g., value measurement in the GLOBE project and the European Values Survey). However, this approach is criticized for capturing a rather abstract notion of the desirable, i.e., people report on what they feel they ought to desire rather than on what they actually desire (Smith, 2005).
The GLOBE project surveyed matched samples of over 17,370 middle managers from 951 local companies and three industry sectors (food processing, finance, and telecommunications). A full description of the method and items can be found in House et al. (2004) and at www.thunderbird.edu/wwwfiles/ms/globe/instruments.asp.
ILSA/CAS stands for Individual-Level Scales, Aggregate/Create Aggregate-level Scales. This reflects Peterson and Castro's (2006) assumption that the GLOBE descriptive norms scales were created at the individual level of analyses and were subsequently aggregated, i.e., the mean country scores per scale calculated (ILSA). These aggregated scores are then subjected to a second-order, country-level factor analysis (CAS). It is the CAS part that we essentially replicate in our paper, i.e., the second-order factor analyses of the mean country scores of the descriptive norm dimensions provided by GLOBE.
We use the response-bias-corrected scores provided by House et al. (2004). Because of high cross-loadings, we drop institutional collectivism. Because of the lack of a clearly based hypothesis, we also drop the gender egalitarianism scale, which loads on a third factor. We repeated the factor analysis on the full sample of 60 societies that took part in the GLOBE project (House et al., 2004) and found a highly similar factor solution.
PBC and SSC themselves may also be useful to delineate country clusters, and future research might elaborate on this. Preliminary work by the authors using discriminant analyses shows that countries can be classified into four cultural groups with an accuracy of 88.2%, according to high or low PBC and high or low SSC. Germanic cultures (House et al., 2004) score low on SSC but high on PBC. Conversely, Southern Asian cultures (and some Confucian Asian cultures) score high on SSC but relatively low on PBC. Nordic and Anglo cultures (House et al., 2004) score high on both dimensions, whereas Eastern and Latin European as well as Latin American cultures tend to score low on both dimensions.
The countries are Argentina, Australia, Austria, Bolivia, Brazil, Canada, China, Colombia, Denmark, Ecuador, Egypt, Finland, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Kazakhstan, Malaysia, Mexico, The Netherlands, New Zealand, Philippines, Russian Federation, Singapore, Slovenia, South Africa, South Korea, Spain, Switzerland, Thailand, Turkey, the United Kingdom, the United States, and Venezuela. To obtain country scores for South Africa, Germany and Switzerland country subgroup scores were combined using weighted means based on the proportion of a subgroup relative to that country's population.
A detailed description of this index is available from the authors. We include the following entrepreneurial framework condition scales described in detail in Levie and Autio (2008): policy, regulations, programs, R&D transfer, and physical infrastructure, as well as scales capturing intellectual property rights and high-growth businesses support and encouragement.
Frazier et al. (2004) outline that mediating effects exist when: (1) the predictor is significantly associated with the outcome when the mediator is not included in the model; (2) the predictor is significantly associated with the proposed mediating variable; and (3) the mediating variable is associated with the outcome, even when controlling for the effects of the predictor. Furthermore, mediation effects will lead to a drop in the weight of the predictor when the mediating variables are added to the model. The significance of the drop is tested with the Sobel test (Frazier et al., 2004), for which we used a p<0.10 cut-off criterion to offset the limited statistical power due to the small sample size.
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Data for this study were provided by the Global Entrepreneurship Monitor (GEM), which is a consortium of research teams representing more than 60 nations across the globe. Names of the members of national teams, the global coordination team and the financial sponsors are published in the annual Global Entrepreneurship Monitor Reports, which can be downloaded at www.gemconsortium.org. We thank all the researchers and their financial supporters who made this research possible. We thank Niels Bosma, Jolanda Hessels, Martin Lukes, Mark Peterson, Ulrike Roesler, André van Stel and John Whitman for helpful comments on previous versions of this manuscript. The work of the first author on this manuscript was partly supported by the European Commission, Socio-economic Sciences and Humanities Grant Agreement 217622. A previous version of this paper was presented at the Academy of Management Annual Meeting, 8–11 August 2008, Anaheim, CA, USA.
Accepted by Rosalie Tung, Area Editor, 21 February 2010. This paper has been with the authors for three revisions.
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Stephan, U., Uhlaner, L. Performance-based vs socially supportive culture: A cross-national study of descriptive norms and entrepreneurship. J Int Bus Stud 41, 1347–1364 (2010). https://doi.org/10.1057/jibs.2010.14